Here are some of the major developments in the world of crypto over the past few days.
Grayscale has withdrawn its 19b-4 application for an Ethereum Futures Exchange Traded Fund (ETF) just three weeks before securities regulators were due to rule. On May 7, the virtual currency asset management company filed a notice of withdrawal for the Grayscale Ethereum Futures Trust with the U.S. Securities and Exchange Commission. Grayscale first filed a 19b-4 application for an Ether Futures ETF on September 19, 2023. If approved, it would have been listed on the New York Stock Exchange.
Bloomberg ETF analyst James Seifert initially said Grayscale planned to strategically use its Ether futures ETF as a "Trojan horse" to get the SEC to approve its Spot Ether ETF. However, he expressed confusion as to why Grayscale is pulling out now when the SEC is due to decide whether to approve at least one Spot Ether ETF application on May 23, just over two weeks away.
Grayscale's withdrawal does not seem to affect these chances. However, Seifert argues that Grayscale currently has "no avenue" to sue if the SEC denies the Spot Ether ETF's application. The SEC has until May 23rd to decide on VanEck's application, while the deadlines for ARK 21Shares and Hashdex are May 24th and 30th. Applications for Grayscale, Invesco Galaxy, BlackRock, and Fidelity must be submitted in June, July, and August.
The Hong Kong Monetary Authority (HKMA), Hong Kong's financial regulator and central bank, is working with the industry to explore the tokenization of assets. On May 7, the HKMA formally announced that it will form a special community of industry representatives and regulators to develop tokenization standards. The initiative also aims to promote and support interoperability between central bank digital currencies (CBDCs), a type of digital money used by banks and financial institutions.
The private sector is represented by seven members including Bank of China (Hong Kong), Hang Seng Bank, HSBC, Standard Chartered Hong Kong, Hashkey Group, Ant Digital Technologies, and Microsoft Hong Kong. The companies and authorities will jointly design and launch the Ensemble Sandbox project, expected to launch around mid-2024, to enable further research and testing of tokenization use cases.
The HKMA's announcement comes several months after the authority first announced an ensemble of projects to support the development of Hong Kong's tokenization market. Tokenization is the process of issuing digital representations of real-world things such as fiat currencies, stocks, commodities, and real estate. Blockchain-based real-world tokenization (RWA) has emerged as one of the key trends for 2024 as investors seek new ways to diversify their portfolios.
U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler seems tired of answering questions about cryptocurrencies, recently stating that questions about cryptocurrencies compared to traditional finance are "very He commented that he received "a lot." "Cryptocurrency is just a small part of our overall market," Gensler said on CNBC's Squawk Box on May 7, in response to a question about what the SEC's priorities are.
Mr. Gensler compared the $110 trillion capital market overseen by the SEC with the $2.4 trillion cryptocurrency market, stating that much of the latter does not comply with U.S. securities laws and is subject to fraud and fraud in the market. , claimed to account for a large share of the problem. Gensler first fielded a series of questions to Robinhood about the SEC's Wells notice alleging that the cryptocurrency listing and custodial service violates securities laws, saying he was not authorized to speak to any companies. Stated.
The SEC has filed six virtual currency-related lawsuits so far in 2024. In 2023, the SEC filed 46 enforcement actions against crypto companies, the highest in a decade and more than double the number in 2021. At least 12 lawsuits brought by the SEC are still pending in U.S. courts, and many defendants have been charged. They are accused of misleading the market, selling unregistered securities, and illegally trading them. Tokens are not securities.